carbon limited

The chancellor has allocated £300m to heat networks. What happens next matters – a lot.

When I started working in the low carbon sector in the early noughties, it felt like we had all the time in the world. You could tinker about with gizmos like earth pipes and building-mounted wind turbines and feel like you were doing good. Hockey stick carbon graphs seemed a bit abstract and rarely got people’s blood pumping.

The intervening years have flashed past. Now in 2016, Governments, businesses and communities around the world have woken up to the scale of the threat from climate change. Pressure to act is mounting.

In the UK, we got off to a reasonable start. But having met some relatively easy carbon budgets, according to the Committee on Climate Change, we’re now badly off course for tougher budgets in the 2020s. We’re also set to miss our 2020 renewables targets. Time is short and the stakes are high: today’s policy decisions may determine whether we hit our reduction targets for 2050.

Heat accounts for around a third of UK emissions, so we must tackle heat to have a hope of hitting our 2050 reductions. To do this, we’ve got two tools in the box: low carbon heat networks and electrification of heat – and we’ll have to make extensive use of both.

The policy driving uptake of heat networks has been, well… suboptimal. While we extol the virtues of extensive Danish and Swedish heat networks, we’ve shunned the state-led policies that brought them into existence. Instead, policymakers in the UK have reached for the lever closest to hand: the planning system.

As a result, thousands of tiny networks have sprung up as part of new-build housing projects, each isolated from the others. In a regulatory vacuum, developers and housing associations have gropingly tried to find their way – with widely varying results. Many heat networks achieve only dismal efficiencies and some customers have been forced to endure poor standards of service.

The sector has begun to tackle efficiency and customer protection with launch of the Code of Practice and the Heat Trust. In addition, there is a push for clients to set clear, measurable targets and then hold their project teams to them.

High efficiency and decent customer care? You might think this is fundamental stuff that we ought to be able to take for granted. And I agree, but we’re not there yet.

And while the sector has been focused on just getting the basics right, many stakeholders are already asking bigger questions about when all these networks will deliver significant carbon savings. When will they connect up heat customers with sources of low carbon heat? At the moment, no one knows.

Last November, onto this stage walked George Osborne with £300m earmarked for development of heat networks. It’s now up to DECC to work out how the money should be spent.

There’s a real danger that it will be spent on more of what we’ve already got: isolated networks of varying standards with limited access to low carbon heat. If this happens, heat networks are unlikely to make a serious contribution to carbon reductions for the next 4 or 5 years. But this pot also provides a golden opportunity to address the bigger questions and give the UK a leg up in its efforts to cut national emissions.

So what’s the best way for DECC to spend the money? I’ll make some suggestions in the next post.